Week 8 — Midterm Review & Exam
Why this matters
A café owner deciding on one more open hour, a nursing student weighing one more hour of review against sleep, and a city planner adding one more bus route all ask the same question: what does one more unit add, and what does it cost?
In plain language
This week you look back over seven weeks of models and ask each one for only two things. They are the one graph it draws (the picture you sketch) and the one calculation it asks for (the number you work out from it). Then you learn one small new habit called thinking at the margin (deciding a choice one extra unit at a time). It asks what one more hour would add and what it would cost. Last, you sit the midterm, which checks the first seven weeks only.
- Already covered: Weeks 1–7 built six models, from the frontier to price controls and taxes.
- This week: one graph and one calculation per model, plus thinking at the margin.
- How they connect: the margin rule asks Week 1's question about cost one unit at a time.
- Where we're going next: Week 9 starts a new unit on firms with production and costs.
Focus
What graph and calculation does each model ask for, and when is one more unit worth it?
By the end of this module, you should be able to:
- [ ] draw and use each model's one graph and one calculation
- [ ] apply the marginal-benefit and marginal-cost rule to a choice
- [ ] leave a sunk cost out of a decision
To-do
Plan your week
- Read Chapter 8 (35–45 minutes), then the lecture and slides.
- Work the practice set (15–25 minutes) and the discussion.
- Use the study guide and practice exam, then take the midterm.
This week's checkpoint: decide how many extra hours the café opens and say why the rent is left out.
You've got this
Take the models one at a time, and ask your instructor early.
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